FINANCING HOLDS UP HARBOR CITY PROJECT

Efforts to turn a drab business area into a luxury hotel and office complex have been slowed as developers hunt for money to finish the work at the mainland end of the Eau Gallie Causeway.

G.A. van Huesden, co-owner of United Developers and Investors Inc., said Thursday the old Eau Gallie downtown redevelopment project "is still on the front burner," but the company is trying to find money to replace a $7 million industrial development revenue bond it lost in January.

The money is needed to refurbish the Oleander Hotel, a gutted 1926 structure on the north side of Eau Gallie Boulevard. The three-story Mediterranean-style hotel will be the main attraction for the $30 million Harbor City Centre project.

Plans call for the hotel to reflect local history in a lavish way, with 56 large hotel rooms, roof gardens overlooking the Indian River and dining and lounge facilities. Brass and crystal will be used throughout. Van Heusden said the bond money was approved last year on the condition that the hotel be placed on the registry of national historic monuments. His company decided against the bond because previous owners made too many changes to the hotel to meet register standards, and plans for the hotel would make it unacceptable for historic monument status.

Hotel reconstuction was scheduled to begin by the end of last year. Van Heusden said no new timetable has been established.

Other work in the area has not been hampered, he said.

Some of the buildings already have received facelifts, and in about two weeks workers will begin building a restaurant where the east and west lanes of Eau Gallie Boulevard merge.

Although van Heusden would not discuss details of the project, initial plans called for an 8- to 12-story office complex near the hotel, a 400-car parking garage, and restoration of the 94-year-old Creel Building and the 60- year-old Eau Gallie State Bank building. The bank will become an art gallery.